Concerned over unethical measures adopted by some micro-finance institutions (MFIs) to recover loans, Montek Singh Ahluwalia, deputy chairman, Planning Commission, today said regulatory guidelines with a code of conduct would soon be introduced.

Ahluwalia was addressing a micro-finance seminar in New Delhi.

He said the proposed bill should aim at greater "transparency and promoting codes of conduct" enabling the regulator to intervene, where a micro-finance organisation is visibly doing something which is improper.

The government will table a bill in Parliament in the coming Budget session on micro finance, appointing NABARD as a regulatory authority.

Ahluwalia said the proposed regulator could lay down a code of conduct so that "a micro-finance organisation should not be use unethical loan recovery measures.

He supported the finance ministry's view that there should not be any cap on interest rate for micro financing and favoured a competitive environment to bring the interest rates to reasonable levels.